After what feels like endless years of speculation it looks as if the long held out promise of Video on Demand (VoD) may finally be gaining some market traction (albeit still relatively modest in revenue terms), in part as a result of ‘day and date’ release experiments by certain of the major studios.
But don't take my word for it.
Here’s Variety scribe Diane Garrett writing recently in her splendid Consumed by Media blog:
‘To hedge their bets, more studios have decided to follow Warners lead and release pics simultaneously on DVD and VOD. Sony and Universal collapsed the VOD windows for “Angels & Demons,” “The Ugly Truth,” “The Taking of Pelham 1 2 3,” “Julie & Julia” and “Bruno.” Warners will do it on “Orphan,” “Four Christmases” and “Terminator: Salvation.”
If people are going to rent rather than buy, studios vastly prefer they view movies on VOD. It’s simple economics: Studios get a bigger cut of each VOD transaction than they do with disc rentals. The shorter the VOD window, the more enticing a rental prospect that delivery platform becomes.’
In support of this shift in the business model (shift is the correct term, as it's hardly revolutionary; a shuffle of the cards rather than a whole new deck), Susanne Ault, Garrett’s Variety stablemate, quotes Sean Carey of Sony Pictures Home Entertainment:
"It's much more beneficial if the consumer buys content (instead of) renting content. That being said, we do feel that, for some titles, moving the VOD date to the same day as sell-through can grow [the business]."
Against this backdrop, the European Audiovisual Observatory (in association with the French government Directortate for Media Development) last week published a timely study charting recent developments in the European VoD market ('Video on demand and catch-up TV in Europe').
Using criteria established by the European Audiovisual Media Services Directive to determine what constitutes a VoD service, the study identified a total of 696 services operated by 366 providers at the end of December 2008. The UK had the most services in Europe (145), followed by France (106) and Italy (93) (see Figure 1).
More than half these services were delivered via the internet (57%), 30% by Internet Protocol television (IPTV) across a DSL network, 7% on cable services, 4% by digital terrestrial television (DTT) and less than 3% by satellite. According to the press release, the study does not ‘take account of services distributed on mobile telephones […] websites devoted solely to the provision of information, trailers or adult programmes. Nor does it consider the channels set up by commercial undertakings in the context of video sharing sites such as YouTube or Dailymotion.’
Figure 1: Number of on-demand audiovisual media services in Europe by country of reception and type of network (December 2008)
Source: European Audiovisual Observatory
The press release concludes with the finding that on-demand services are provided by a variety of different players, including broadcasters, film companies, satellite and cable operators, alongside relative newcomers to content distribution in the form of telecoms operators and hardware manufacturers (of games consoles, mobile telephones and other multimedia devices).
Although the press release doesn’t go into detail, the study also looks at the prevailing VoD business models and surveys the commercial landscape within which these developments are occurring. A full content list and purchase details can be found here.
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